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The Fiscal Cliff is the name given for the 2013 increase of Federal Government taxes and budget cuts.
The Bush-era tax cuts expire and the 2013 "Budget Control Act" kicks in, among other budget cuts & new taxes.
The Fiscal Cliff is set to reduce the 2013 US Government budget deficit by roughly half.
The Fiscal Cliff will remove $607 Billion from economy (GDP), resulting in 4% drop, pushing it back into recession.
The Fiscal Cliff can NOT be avoided. It must happen to fix the budget deficit; any delay must be paid for later.
The Fiscal Cliff will NOT reduce the US debt, only slow down the growth.
The Fiscal Cliff's size and impact are visualized below in physical $100 bills.
Originally posted by Taupin Desciple
reply to post by Wrabbit2000
You're the man Wrabbit That a very good cup of coffee
When something is as broke as this economy, fixing it is going to be problematic and hurtful for everyone. It has to be. Both sides did their share in breaking it, so both sides are going to feel a bit of financial pain.
The policy, known as quantitative easing and often abbreviated as QE3, entails buying $40 billion in mortgage-backed securities each month. The end date remains up in the air, as the Fed will re-evaluate the strength of the economy in coming months.
The Fed is wasting no time. The purchases begin Friday and are expected to add up to only $23 billion for the remainder of September.
"I want to be clear -- While I think we can make a meaningful and significant contribution to reducing this problem, we can't solve it. We don't have tools that are strong enough to solve the unemployment problem," he said.
The Fed's accommodative policies have been contentious from the start. Republicans often warn that as the Federal Reserve has expanded the money supply, it has set the economy up for rapid inflation in the future.
Indeed.... Now, here is this for a thought to stop you cold, after seeing the true visualization of what this money IS at these levels........Where is it all really being spent?
Originally posted by Wrabbit2000
I'm not sure I entirely agree with the premise they come from in this needing to happen and especially to happen in the brutal way it's going to if the politicians on both sides don't pull the figurative rabbit out of their hats for a Christmas Gift. However, the numbers are important to see and nothing says it like that.
With a constant surplus of 500 Billion per year it would be 2079 before our debt is eliminated. Increasing the surplus to 750 Billion means we are debt free in 2044. These projections would be unacceptable to any debtors(not to mention it is unreasonable to expect 30+ years straight of surplus).